American pilots OK contract
Pilots at American Airlines approved a new labor contract, which could clear the way for consideration of a merger with US Airways.
The pilots’ union announced Friday that 74 percent of its members voted to ratify the contract. Pilots rejected a similar offer in August, but union leaders lobbied hard for passage the second time around.
Under the contract, pilots will get pay raises and own 13.5 percent of American Airlines’ parent AMR Corp. after it emerges from bankruptcy protection.
Union officials and analysts say the vote gives AMR creditors certainty about the company’s labor costs, making it easier for them to weigh which gives them more money: American on its own, or getting bigger through a merger with US Airways.
China to buy Canada’s Nexen
Canada has approved China’s biggest overseas energy acquisition, a $15.1 billion takeover by state-owned CNOOC of Canadian oil and gas producer Nexen, but is promising to review rules for future deals.
Prime Minister Stephen Harper’s Conservative government has been studying whether CNOOC’s deal and a smaller foreign takeover, Malaysian state-owned oil firm Petronas’ $5.2 billion bid for Progress Energy, represent a “net benefit” to the country. The Harper government also approved the Petronas deal on Friday.
Concerns have been raised that approvals could lead to a flood of deals that put control of Canada’s vast energy in foreign hands.
Consumer debt at record high
Americans swiped credit cards more often in October and borrowed more to attend school and buy cars. The increases drove U.S. consumer debt to an all-time high.
The Federal Reserve says consumers increased their borrowing by $14.2 billion in October from September. Total borrowing rose to a record $2.75 trillion.
Borrowing in the category that covers autos and student loans increased by $10.8 billion. Borrowing on credit cards rose by $3.4 billion, only the second monthly increase in the past five months.
The strong rise in borrowing came in a month when American cut back on consumer spending, reflecting in part disruptions from Superstorm Sandy.
Panel rejects new painkiller
Government health experts overwhelmingly voted against a stronger version of hydrocodone, the powerful painkiller that is among the most widely abused medications in the United States.
The Food and Drug Administration’s panel of pain specialists voted 11-2 with one abstention against Zohydro for moderate to severe chronic pain. The drug was developed as a long-acting pain reliever by San Diego-based Zogenix Inc.
The FDA is not required to follow the group’s recommendation but often does so.
If approved, Zohydro would be the first pure hydrocodone medication approved in the U.S. Existing products combine the drug with lower-strength painkillers, such as acetaminophen.
Apple again drags Nasdaq
U.S. stocks closed higher Friday after gains from a better-than-expected November jobs report shook off a drop in December consumer sentiment.
The Dow Jones industrial average closed up 81.09 points, or 0.6 percent, to 13,155.13, led by JPMorgan Chase & Co. and Bank of America Corp. For the week, the Dow industrials climbed 1 percent for their third consecutive week of gains.
The S&P 500 index advanced 4.13 points, or 0.3 percent, to close at 1,418.07. For the week, the index advanced 0.1 percent for its third week of gains.
Losses for Apple Inc., however, weighed on the tech-heavy Nasdaq composite index, which closed down 11.23 points, or 0.4 percent, to 2,978.04, a loss of 1.1 percent for the week. Apple finished down 2.6 percent for the day and 8.9 percent for the week.
IBM to change 401(k) policy
IBM is making changes to its employee benefits that may cause other large corporations to follow suit.
The technology company will begin making contributions to employees’ 401(k) accounts in lump-sum annual payments, rather than at the time of each paycheck. The move will help the company cut retirement plan expenses.
Contribution amounts won’t change. But employees who leave IBM prior to Dec. 15 in a calendar year won’t be due that year’s end-of-year lump-sum 401(k) contribution, unless they’re retiring.
Compiled from staff and wire reports